Definition of credit

1. entry on the right side of an account. As a verb, to make an entry on the right side of an account. Under the double entry bookkeeping system, credits increase liabilities, equity, and revenues and decrease assets and expenses.
2. to enter or post a credit.
3. the ability to buy an item or to borrow money in return for a promisem to pay later.
4. in taxation, a dollar for dollar offset against a tax liability.

faith, from the Latincredito. An agreement by which something of value-goods, services, or money-is given in exchange for a promise to pay at a later date.

1. Banking: lender's agreement to advance funds, based on an estimation that the debt will eventually be repaid, or to refrain from collecting a previously existing debt, as in a refinancing.
   Bank credit is classified by: type of borrower, for example, loans to consumers (mortgages, auto loans, credit cards) as opposed to loans to businesses (commercial lines of credit, working capital loans); type of collateral pledged, if any; and terms of repayment. Some bank loans are repaid according to a fixed schedule, for example, a 30-year mortgage; others such as a demand loan to a business that may be called at any time by the lender.
2. used by bank credit analysts and lenders instead of borrower or loan A lender might say, "I'll approve the credit if it's a four-year loan," or "I think the credit is good."
3. bookkeeping entry representing a deposit of funds into an account. In accounting, a credit entry notes an increase in liabilities, owner's equity, and revenues, and a decrease in assets and expenses. Contrast with debitSee also ability to pay; closed-end credit credit enhancement credit line; credit rating; credit report; credit risk; Equal Credit Opportunity Act (ECOA); extension agreement; fair credit billing act; fair credit reporting act; forbearance; installment credit; line of credit; open-end credit; Regulation B; Regulation G; Regulation T; Regulation Z; revolving credit; secured loan; usury.

1. loans, bonds, charge-account obligations, and open-account balances with commercial firms.
2. available but unused bank letters of credit and other standby commitments as well as a variety of consumer credit facilities.
3. adjustment in the customer's favor or increase in equity.
4. in accounting, entry that increases liabilities, owners' equity, revenue, and gains and decreases assets and expenses.
5. tax credit, a dollar-for-dollar reduction in a taxpayer's tax liability. See also specific credits, including child and dependent care credit, investment tax credit, low-income housing credit.

In general: loans, bonds, charge-account obligations, and open account balances with commercial firms. Also, available but unused bank letters of credit and other standby commitments as well as a variety of consumer credit facilities.In general:

On another level, discipline in which lending officers and industrial credit people are professionals. At its loftiest it is defined in Dun & Bradstreet's motto: "Credit-Man's Confidence in Man."
Accounting:entry-or the act of making an entry-that increases liabilities, owners' equity, revenue, and gains, and decreases assets and expenses. See also credit balance.
Customer's statement of account:adjustment in the customer's favor, or increase in equity.

1. i

   n finance, the availability of money.
   Example: When money and credit are readily available, it is easier to buy real estate. Credit policy is determined to a large extent by the federal reserve system.

2. in accounting, a liability or equity entered on the right side of the ledger.
   Example: In closing statements, the credit column shows what is due and payable. The buyer is credited with amounts paid; the seller is credited with the price of the real property and prepaid items.